0.075: iomega joins emc storage division
There should little surprise in today's after-market-close announcement that EMC has reached a definitive agreement to acquire Iomega Corporation (IOM). From the moment of the initial (SEC-mandated) disclosure of EMC's unsolicited offer last month, most people probably assumed it was only a matter of time (and price).
Still, several questioned the logic of such a deal over the past several weeks.
Even with the expanded product portfolio, spanning storage, content management, security, virtualization, SaaS and personal information management, EMC hard-good sales is still firmly rooted in addressing the information storage needs of enterprises, large and small, primarily through direct sales and value-added resellers.
And it doesn't take much of a visit to the Iomega web site to understand that they couldn't possibly be more different than EMC - they serve primarily the home and small business consumer markets, primarily through distribution and retail routes to market.
The two could not be further apart.
Which is precisely why this makes sense...
synergy
That's the whole idea. Iomega has the established routes to market to reach the home consumer and small business, and EMC doesn't. More importantly, EMC has products targeted exactly at the markets that Iomega serves - products like EMC Retrospect and EMC Lifeline, for example.
Most of the nay-sayers seemed to overlook the significance of that last month.
Fact is, Iomega has been packaging and selling EMC Retrospect backup software with all its external disk drives for about four years.
More significantly, Iomega is also one of the early supporters of the EMC Lifeline - they were even included in EMC's Lifeline announcement back in January. Iomega then announced, and today reaffirmed, their intent to integrated EMC Lifeline into their next generation StorCenter Network Hard Drive multi-drive network storage products come this summer.
Starts to make a little bit of sense now, doesn't it?
the china syndrome
OK - so now think about China...with more than 20% of the world's population and what has to be termed a bourgeoning economy, China is inarguably the largest new consumer market opportunity on this planet.
Iomega is clearly targeting the Chinese consumer market, as evidenced by the deal their management was attempting to construct before EMC stepped into the picture.
And EMC is also clearly investing in China, both as a market opportunity, and as a key component of our globalization strategy.
So. Take a company with a globally established brand and routes to market for consumer technology. Combine focus with another globally established brand with an established direct and a developing indirect channel for delivering enterprise solutions in China - PLUS established product development operations in both Shanghai and Beijing. (I'm sure you know that governments like China and Brazil tend to prefer that sort of thing).
And then, factor in that EMC Lifeline was largely developed in China.
Starting to make a little more sense now?
Iomega. EMC.
Different customers. Channels. Routes to Market..
Retrospect. Lifeline.
China.
That adds up to more than a lot of disk drives, don't you think?
Brilliant!
However, I do hope that Iomega and EMC’s new Consumer/Small Business Products Division come up with a better name for their Lifeline-based products aimed at the Chinese market. Perhaps something has just been lost in the translation, but EMC StorageCredenza just ain't doing it for me!
But then what do I know? I'm just The American Symm Dude.
P.S. - There's a part of me just loves the brand potential of WysDM®, EMC's other recent acquisition. You don't often get to use powerful names like that. Here's hoping that EMC's marketing team finds a way to capitalize on that Registered Trademark asset!
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